IFMA Chairman Anuj Poddar said this is adding value to everyone including the customers to everyone and will encourage them to go for higher energy-efficient products.
The Return on Investment (ROI) is around 18-24 months for a consumer if he opts for a high energy efficient fan and any new technology takes time for adoption.
“The last few months were a transition period for the industry. We have gone from non-star to a star rating very smoothly, there were some hiccups and other things otherwise, we had anticipated well and planned it,” Poddar said.
In the next two to three months, lots of Indian homes have gone of renovation, which created replacement-driven demand of ceiling fans. Now the industry expects a better demand, he added. “The next two months, which are like a mini season for us, a lot of renovation-led activities are happening and we are now seeing green shoots. We are hopeful that we all should have much better traction with consumers getting aware of star rating,” Poddar added. The Indian fan industry is estimated to be around Rs 10,500 crore, in which around 200 entities including 14 branded players operate in the segment. The transition to energy rating has implications on the cost side and that needs to be passed on to the consumers.
“From the margins perspective there is an impact on the industry. I do not think that full cost of this transition has been passed on to the consumers at the product level. That need to be done sooner than later,” said Poddar.
Besides, IFMA also expects the government to place fans under a lower GST bracket of 12 per cent from the existing 18 per cent, considering it is a mass product.
“This is something, which we are saying for last two years. If not under 5 per cent (the lowest one), it should be at least under 12 per cent (GST),” he added.
From January this year, fan manufacturers have to display star ratings between 1 to 5 stars on their fans. The star rating is dependent on service value (air delivery in cubic metres per minute divided by energy consumption in wattage), as per the Bureau of Energy Efficiency (BEE) norms.
Leading brands operating in the segment are Orient Electric, Havells, Crompton Greaves Consumer Electricals, Usha International, Luminous Power etc.
The category is witnessing a rise in rural penetration with increased electrification, while in urban markets, the replacement cycle is getting shorter due to premiumisation, the IFMA report said.
Moreover, there is also a faster shift towards the organised sector.
The demand for premium fans with better aesthetics has been on the rise over the past 3-5 years with increasing consumer preferences towards enhanced and appealing interiors, it added.
